Correlation Between Sanasa Development and Galadari Hotels
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By analyzing existing cross correlation between Sanasa Development Bank and Galadari Hotels Lanka, you can compare the effects of market volatilities on Sanasa Development and Galadari Hotels and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sanasa Development with a short position of Galadari Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanasa Development and Galadari Hotels.
Diversification Opportunities for Sanasa Development and Galadari Hotels
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sanasa and Galadari is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sanasa Development Bank and Galadari Hotels Lanka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galadari Hotels Lanka and Sanasa Development is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sanasa Development Bank are associated (or correlated) with Galadari Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galadari Hotels Lanka has no effect on the direction of Sanasa Development i.e., Sanasa Development and Galadari Hotels go up and down completely randomly.
Pair Corralation between Sanasa Development and Galadari Hotels
Assuming the 90 days trading horizon Sanasa Development is expected to generate 3.45 times less return on investment than Galadari Hotels. But when comparing it to its historical volatility, Sanasa Development Bank is 1.53 times less risky than Galadari Hotels. It trades about 0.08 of its potential returns per unit of risk. Galadari Hotels Lanka is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,540 in Galadari Hotels Lanka on August 31, 2024 and sell it today you would earn a total of 120.00 from holding Galadari Hotels Lanka or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanasa Development Bank vs. Galadari Hotels Lanka
Performance |
| Timeline |
| Sanasa Development Bank |
| Galadari Hotels Lanka |
Sanasa Development and Galadari Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanasa Development and Galadari Hotels
The main advantage of trading using opposite Sanasa Development and Galadari Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanasa Development position performs unexpectedly, Galadari Hotels can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Galadari Hotels will offset losses from the drop in Galadari Hotels' long position.| Sanasa Development vs. Asiri Surgical Hospital | Sanasa Development vs. HVA Foods PLC | Sanasa Development vs. Lanka Realty Investments | Sanasa Development vs. Singhe Hospitals |
| Galadari Hotels vs. HNB Finance | Galadari Hotels vs. Prime Lands Residencies | Galadari Hotels vs. Jat Holdings PLC | Galadari Hotels vs. E M L |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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